Half-year financial report As at 30 June 2011

Transcription

1 Half-year financial report 2011 Board of Directors meeting of 26 July 2011 Unofficial translation of the French-language Rapport financier semestriel au 30 juin 2011 of PagesJaunes Groupe, for information purposes only. This English-language translation of the consolidated financial information prepared in French has been provided solely for the convenience of English-speaking readers should be read in conjunction with, and construed in accordance with French law and accounting standards applicable in France. In the case of any divergences with the French original and the English version, only the French original has legal value. In consequence, the translations may not be relied upon to sustain any legal claim, nor be used as the basis of any legal opinion. Despite all the efforts devoted to this translation, certain errors, omissions or approximations may subsist. PagesJaunes Groupe, its representatives and employees decline all responsibility in this regard. PagesJaunes Groupe Limited company having a Board of Directors and a capital of 56,196, Registered office: 7 avenue de la Cristallerie Sèvres Cedex Commercial and companies register Nanterre

2 CONTENTS 1. CERTIFICATION BY THE PERSONS ASSUMING RESPONSIBILITY FOR THE HALF-YEAR FINANCIAL REPORT HALF-YEAR ACTIVITY REPORT AS AT 30 JUNE Overview Commentary on the results for the first half of Analysis of the revenues and gross operating margin of the Internet segment Analysis of the revenues and gross operating margin of the Printed Directories segment Analysis of the revenues and gross operating margin of the Other Businesses segment Analysis of consolidated operating income Employee profit-sharing and share-based payment Depreciation and amortisation Operating income Analysis of income for the period Net financial income Corporation tax Income for the period Consolidated liquidities, capital resources and investment expenses Risks and uncertainties relating to the second half of CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Consolidated income statement Statement of comprehensive income Statement of financial position Statement of changes in shareholders equity Cash flow statement Notes to the condensed consolidated financial statements Note 1 Description of the business activity Note 2 Basis for preparation of the condensed consolidated financial statements and accounting principles Note 3 Segment information Note 4 Financial result Note 5 Corporation tax Note 5.1 Group tax computation Note 5.2 Balance sheet tax Note 6 Derivative financial instruments Note 7 Cash and cash equivalents, net financial debt Note 8 Shareholders equity Note 9 Changes in the scope of consolidation Note 10 Information on related parties Note 11 Off-balance-sheet commitments Note 12 Disputes and litigation significant changes in the half year Note 13 Events subsequent to the closing date of 30 June AUDITORS REPORT ON THE HALF-YEAR FINANCIAL INFORMATION FOR PagesJaunes Groupe Half-year financial report 30 June

3 1. CERTIFICATION BY THE PERSONS ASSUMING RESPONSIBILITY FOR THE HALF-YEAR FINANCIAL REPORT We certify that to the best of our knowledge the condensed financial statements appearing in chapter 3 of the present half-year financial report have been prepared in accordance with the applicable accounting standards and present a true picture of the assets, financial situation and results of all of the companies included within the consolidation scope of PagesJaunes Groupe. We also certify that to the best of our knowledge the half-year activity report appearing in section 2 of the present half-year financial report is a true reflection of the information referred to in article of the General Regulations of the Autorité des Marchés Financiers, namely the important events arising in the first six months of the 2011 financial year and their impact on the condensed consolidated financial statements, as well as a description of the principal risks and the principal uncertainties for the second half of the 2011 financial year and a report on the principal transactions among related parties. Mr Jacques Garaïalde Chairman of the Board of Directors of PagesJaunes Groupe Mr Jean-Pierre Remy Chief Executive Officer of PagesJaunes Groupe PagesJaunes Groupe Half-year financial report 30 June

4 2. HALF-YEAR ACTIVITY REPORT AS AT 30 JUNE Overview The Group s core business activity is the provision of local information, principally in France, through the publication of printed and online directories, and the publication of editorial content to assist users in making searches and choices. Through its subsidiaries, the PagesJaunes Group conducts three complementary businesses: the provision of content and services, media and advertising representation. It offers a diversified range of products and services associated with these activities for the general public and businesses. The Group s business model is based on that of the media, i.e. offering quality content which generates an audience and then monetising this audience, either as a whole or in segments, among businesses. The Group s activities are organised in three segments: Internet: These are the activities carried out through the Internet. The main products are listing, targeted advertising and the provision of advertising space for local and national advertisers (often referred to as display) and finally a complete range of products and services for the provision and distribution of information with local content. This segment comprises all the Internet activity of PagesJaunes SA: the pagesjaunes.fr and pagespro.com online directories, the creation and marketing of display advertisements and content, the development and hosting of Internet sites, and annoncesjaunes.fr online small ads. The Group s other subsidiaries are also represented in this segment: the activities and services provided by Mappy (including geolocation, base maps, online bookings), direct marketing (of the ing type) carried out by the PagesJaunes Marketing Services subsidiary, the Internet activities of QDQ Media and Editus in Spain and Luxembourg respectively (listing and Internet display, production and hosting of websites, sale of web optimisation and visibility solutions of the SEO or SEM type). This segment also includes online people and profile searching with 123people, online quotation requests and the generation of contacts in the building and construction industry with Keltravo, the management of online real-estate ads with A Vendre A Louer, promotional offers (couponing) with 123deal and the Internet advertising representation activity of Horyzon Média. Printed Directories: This is the Group s historical activity, involving the publication, distribution and sale of advertising space in printed directories (PagesJaunes, l Annuaire and the directories of QDQ Media in Spain and Editus in Luxembourg). Other Businesses: This comprises on the one hand the specific activities of PagesJaunes SA: directory enquiry services by telephone and SMS ( ), Minitel and the QuiDonc reverse directory. This segment also includes a number of activities of PagesJaunes Marketing Services: telemarketing, data mining, database generation, prospect processing and traditional direct marketing activities (data entry and postage). PagesJaunes Groupe Half-year financial report 30 June

5 2.2. Commentary on the results for the first half of 2011 PagesJaunes Group in million euros Change 2011/2010 Revenues % External purchases (117.2) (116.4) 0.7% Other operating income % Other operating expenses (4.9) (5.9) -16.9% Salaries and charges (168.2) (166.7) 0.9% Gross Operating Margin % As % of revenues 46.0% 47.1% Employee profit-sharing (6.8) (7.2) -5.6% Share-based payment (0.7) (0.9) -22.2% Depreciation and amortisation (11.7) (8.7) 34.5% Result of asset disposals (0.2) (0.0) na Acquisition costs of shares (0.6) (0.4) 50.0% Share of profit or loss of an associate (0.0) - na Operating income % As % of revenues 42.2% 43.9% Financial income % Financial expenses (59.8) (47.4) 26.2% Gain (loss) on foreign exchange - - na Net financial income (57.3) (45.6) 25.7% Income before tax % Corporation tax (62.7) (69.6) -9.9% Income for the period % of which attributable to: - Shareholders of PagesJaunes Groupe % - Non-controlling interests 0.0 (0.0) The number of visits to the Group s Internet sites as a whole, in France and internationally, totalled 1,111.6 million in the first half of 2011, representing a rise of 10.3% compared to the first half of 2010 on a like-for-like basis, i.e. including pre-acquisition visits to 123people, A Vendre A Louer and Keltravo. Excluding 123people, the number of visits to the Group s Internet sites as a whole totalled million in the first half of 2011, representing a rise of 9.5% compared to the first half of In May 2011, the Group s Internet sites in France collectively ranked fifth among the most consulted Internet sites, with 19.4 million unique visitors, representing a reach rate of 46.6% of the total number of Internet users in France. Excluding 123people, the Group s fixed and mobile Internet sites in France recorded million visits in the first half of 2011, representing a rise of 8.3% compared to the first half of 2010, with a doubling of the number of mobile Internet visits compared to the first half of PagesJaunes Groupe Half-year financial report 30 June

6 The consolidated revenues of the PagesJaunes Group amounted to million in the first half of That represents a decrease of 1.8% compared to the first half of 2010 on a comparable publication basis for the printed directories of PagesJaunes and a decrease of 1.5% on the basis of historical data. The decline in revenues from printed directories, down 8.8% compared to the first half of 2010 on a comparable publication basis (8.2% on the basis of historical data), was partly offset by the growth in Internet activities, which rose 6.8% compared to the first half of 2010 to million. Internet revenues consequently made up 52.8% of the Group s revenues in the first half of 2011, compared to 48.7% in the first half of The Group s gross operating margin amounted to million in the first half of 2011, representing a decrease of 3.8% compared to the first half of The continuation of efforts to optimise all the costs of the printed directories and the positive impact of the companies acquired in 2010 and 2011 on the gross operating margin in the first half of 2011 made it possible to continue investing in new Internet products and services while maintaining a high gross operating margin of 46.0% in the first half of 2011, compared to 47.1% in the first half of 2010, despite the impact of the decrease in revenues. The Group s operating income decreased by 5.3% compared to the first half of 2010 to million. The decrease in the operating income resulted mainly from the decrease in the gross operating margin and from the 3.0 million increase in the depreciation and amortisation charge due to the start-up of the investments made in The Group s financial result decreased by 25.7% between the first half of 2010 and the first half of 2011, to (57.3) million, due to the rise in the average interest rate on the gross debt (including hedging instruments), which rose from 4.36% in the first half of 2010 to 5.07% in the first half of 2011, and the 5.1 million of accelerated amortisation of part of the expenses associated with the issue of the bank loan in 2006 and its renegotiation in Income for the period amounted to million, representing a decrease of 14.3% compared to the first half of The information below shows the revenues and the gross operating margin for each of the three segments of the Group: Internet, Printed Directories and Other Businesses. in million euros Change 2011/2010 Internet % Printed directories % Other % Revenues % Internet revenues as % of total revenues 52.8% 48.7% Internet % Printed directories % Other % Gross Operating Margin % As % of revenues 46.0% 47.1% PagesJaunes Groupe Half-year financial report 30 June

7 Analysis of the revenues and gross operating margin of the Internet segment The following table shows the revenues and gross operating margin of the Internet segment in the first half of 2010 and the first half of 2011: Internet in million euros Change 2011/2010 Revenues % Gross Operating Margin % As % of revenues 44.9% 46.6% The revenues of the Internet segment grew by 6.8% in the first half of 2011 to million. This growth was driven by the mobile and display activities in France. The gross operating margin of the Internet segment amounted to million in the first half of 2011, representing a rise of 2.8% compared to the first half of The gross operating margin rate decreased from 46.6% in the first half of 2010 to 44.9% in the first half of 2011, due to an active editorial policy on the pagesjaunes.fr site (purchase of content), investments in advertising and the strengthening of the marketing and technical teams working on both product innovations and new functionalities. The Internet margin of PagesJaunes SA is similar to that of the printed directories Analysis of the revenues and gross operating margin of the Printed Directories segment The following table shows the revenues and gross operating margin of the Printed Directories segment in the first half of 2010 and the first half of 2011: Printed directories in million euros Change 2011/2010 Revenues % Gross Operating Margin % As % of revenues 47.9% 48.9% The revenues of the Printed Directories segment recorded a contained decrease of 8.2% in the first half of 2011, to million. This decline was smaller than that recorded in the previous year (- 9.2% in the first half of 2010 compared to the first half of 2009) due to developments in advertising products in France (particularly surface area promotions). The gross operating margin of the Printed Directories segment amounted to million in the first half of 2011, representing a decrease of 10.0% compared to the first half of The optimisation of all expenses, more particularly those associated with the production, printing and distribution of printed directories, enabled the gross operating margin rate of the Printed Directories segment to be held at 47.9% in the first half of PagesJaunes Groupe Half-year financial report 30 June

8 Analysis of the revenues and gross operating margin of the Other Businesses segment The following table shows the revenues and gross operating margin of the Other Businesses segment in first half of 2010 and the first half of 2011: Other businesses in million euros Change 2011/2010 Revenues % Gross Operating Margin % As % of revenues 37.5% 33.2% The revenues of the Other Businesses segment decreased by 21.3% in the first half of 2011 to 19.2 million. This was due to sharp falls in revenues from telephone directory enquiry services, including both advertising revenues from advertisers and revenues from calls generated by the users of the service. The gross operating margin of the Other Businesses segment amounted to 7.2 million in the first half of 2011, representing a decrease of 11.1% compared to the first half of The gross operating margin rate rose from 33.2% in the first half of 2010 to 37.5% in the first half of The improvement in the margin rate is explained largely by the discontinuation of expenditure on advertising to promote the telephone directory enquiry services ( ). A large campaign had taken place in the first half of Analysis of consolidated operating income The table below shows the Group s consolidated operating income in the first half of 2010 and the first half of 2011: PagesJaunes Group in million euros Change 2011/2010 Gross Operating Margin % Employee profit-sharing (6.8) (7.2) -5.6% Share-based payment (0.7) (0.9) -22.2% Depreciation and amortisation (11.7) (8.7) 34.5% Result of asset disposals (0.2) (0.0) na Acquisition costs of shares (0.6) (0.4) 50.0% Share of profit or loss of an associate (0.0) - na Operating income % As % of revenues 42.2% 43.9% PagesJaunes Groupe Half-year financial report 30 June

9 Employee profit-sharing and share-based payment Employee profit-sharing in the Group amounted to 6.8 million in the first half of 2011, representing a decrease of 5.6% compared to the first half of 2010, in line with the trend in the gross operating margin. The Group s share-based payment expense amounted to 0.7 million in the first half of 2011, compared to 0.9 million in the first half of The expense in the first half of 2010 resulted from the stock option plans set up in 2007 and 2009, while that of the first half of 2011 resulted from the stock option plans set up in 2009 and the second half of Depreciation and amortisation The Group s depreciation and amortisation charges amounted to 11.7 million in the first half of 2011, compared to 8.7 million in the first half of 2010, representing a rise of 34.5%. This reflects the increase in the investments made by the Group which are essential for its business strategy, particularly launches of new products and services for customers and enhanced functionalities on the Group s fixed and mobile Internet sites Operating income The Group s operating income in the first half of 2011 amounted to million, representing a decrease of 5.3% compared to the first half of The Group s rate of operating margin as a proportion of revenues decreased from 43.9% in the first half of 2010 to 42.2% in the first half of Analysis of income for the period The table below shows the Group s income in the first half of 2010 and the first half of 2011: PagesJaunes Group in million euros Change 2011/2010 Operating income % Financial income % Financial expenses (59.8) (47.4) 26.2% Gain (loss) on foreign exchange - - na Net financial income (57.3) (45.6) 25.7% Income before tax % Corporation tax (62.7) (69.6) -9.9% Income for the period % of which attributable to: - Shareholders of PagesJaunes Groupe % - Non-controlling interests 0.0 (0.0) PagesJaunes Groupe Half-year financial report 30 June

10 Net financial income The Group s financial result was a loss of 57.3 million in the first half of 2011, compared to a loss of 45.6 million in the first half of The financial result essentially comprises the interest expense relating to the bank loan, which decreased from 1,950.0 million as at 31 December 2010 to 1,600.0 million as at 30 June 2011, and relating to the bond loan issued on 20 May 2011 at a fixed rate of 8.875% for a total of million. 2011, the bank loan was fully hedged against rises in interest rates by a portfolio of rate swaps and collars maturing at the end of 2011 and 56% hedged by forward swaps maturing at the end of The total interest expense, net of the effect of interest rate hedging instruments, amounted to 49.4 million in the first half of 2011, compared to 42.5 million in the first half of The average interest rate on the debt rose from 4.36% in the first half of 2010 to 5.07% in the first half of This increase of 71 basis points was due to the refinancing operations carried out in the first half of 2011 (see below). For the record, the rate for 2010 as a whole was 4.55%. The financial result also includes 8.5 million of amortisation of loan issue expenses in the first half of 2011, compared to 3.3 million in the first half of 2010, as well as the change in the time value of the collar entered into in November 2006, representing income of 0.9 million in the first half of 2011, compared to income of 1.4 million in the first half of 2010, and stated under change in the fair value of hedging instruments. The issue of the bond loan led to the extinguishment of part of the bank debt and the recognition of 5.1 million of accelerated amortisation of part of the expenses associated with the issue of this loan in 2006 and its renegotiation in Corporation tax The Group recorded a corporation tax charge of 62.7 million in the first half of 2011, representing a decrease of 9.9% compared to the first half of The apparent tax rate was 37.3% in the first half of 2011, compared to 36.1% in the first half of This was mainly due to a prior year tax adjustment of 1.2 million recognised in the first half of 2011 and the recognition of non-recurring deferred tax income of 0.7 million in the first half of 2010 following the option exercised in 2009 to classify the corporate value added contribution (CVAE) under corporation tax Income for the period The Group s income for the period amounted to million in the first half of 2011, compared to million in the first half of 2010, representing a decrease of 14.3% between the two periods. PagesJaunes Groupe Half-year financial report 30 June

11 2.3. Consolidated liquidities, capital resources and investment expenses The table below shows the changes in the Group's cash position at 30 June 2010, 31 December 2010 and 30 June 2011: PagesJaunes Group in million euros As at 30 June 2011 As at 31 December 2010 As at 30 June 2010 Fair value of hedging instruments Accrued interest not yet due Cash and cash equivalents Cash Bank overdrafts (6.5) (2.5) (9.4) Net cash Bank borrowing 1, , ,950.2 Notes Revolving Debt related costs (37.8) (21.4) (24.9) Liability in respect of hedging instruments Fair value of hedging instruments Accrued interest not yet due Earn-outs Other financial liabilities Gross financial debt 1, , ,020.1 Net debt 1, , ,983.0 Net debt excl. fair value of hedging instruments and debt-related fees 1, , ,925.7 The Group s net debt amounted to 1,918.1 million as at 30 June 2011, compared to 1,900.1 million as at 31 December 2010 and 1,983.0 million as at 30 June , it mainly comprised: a bank loan totalling 1,600 million, of which million is repayable at the end of 2013 and million at the end of 2015 and which is fully hedged against rises in interest rates by a portfolio of rate swaps and collars maturing at the end of 2011 and 56% hedged by forward swaps maturing at the end of In addition, a diversified syndicate of banks has granted PagesJaunes Groupe a credit line of approximately million expiring at the end of This credit line was unutilised as at 30 June a bond loan amounting to a total of million at a fixed rate of 8.875% repayable in mid Excluding the fair value of interest rate hedging instruments, representing a liability of 39.7 million as at 30 June 2011 compared to a liability of 82.2 million as at 30 June 2011, and excluding loan issue expenses (debt-related fees) of 37.8 million as at 30 June 2011 compared to 24.9 million as at 30 June 2010, the net debt amounted to 1,916.7 million as at 30 June 2011, compared to 1,925.7 million as at 30 June PagesJaunes Groupe Half-year financial report 30 June

12 The table below shows the cash flows of the consolidated group in the first half of 2010 and the first half of 2011: PagesJaunes Group in million euros Net cash from operations Net cash used in investing activities (32.3) (30.7) Net cash provided by (used in) financing activities (181.6) (191.2) Impact of changes in exchange rates on cash (0.1) 0.0 Net increase (decrease) in cash position (51.7) (24.3) Net cash and cash equivalents at beginning of period Net cash and cash equivalents at end of period The Group s cash and cash equivalents amounted to 51.8 million as at 30 June 2011, compared to 37.1 million as at 30 June The net cash from operations amounted to million in the first half of 2011, compared to million in the first half of 2010, a decrease of 35.3 million, mainly comprising: a gross operating margin of million in the first half of 2011, down 9.8 million compared to the first half of 2010, a decrease of 35.2 million in the working capital requirement in the first half of 2011, compared to a decrease of 51.7 million in the working capital requirement in the first half of 2010, representing a resource reduction of 16.5 million between the two periods, a net disbursement of 44.7 million in respect of financial interest in the first half of 2011, compared to 42.4 million in the first half of 2010, in view of the larger spreads following the partial refinancing of the bank debt, a disbursement of 69.5 million in respect of corporation tax in the first half of 2011, compared to 65.2 million in the first half of The net cash used in investing activities represents a disbursement of 32.3 million in the first half of 2011, compared to a disbursement of 30.7 million in the first half of That represents a rise of 1.6 million, mainly comprising: 20.1 million in acquisitions of tangible and intangible fixed assets in the first half of 2011, compared to 17.4 million in the first half of 2010, reflecting the increase in investments in new Internet products and services, 11.0 million in the first half of 2011 relating to acquisitions of equity interests, net of cash acquired (including A Vendre A Louer, ClicRDV), compared to 16.5 million in the first half of 2010 (123people and Keltravo), in the first half of 2010, 5.3 million of income from disposals of financial assets relating to the sale of Edicom at the end of PagesJaunes Groupe Half-year financial report 30 June

13 The net cash used in financing activities amounted to million in the first half of 2011, compared to million in the first half of 2010, representing a decrease of 9.6 million, mainly comprising: million in respect of dividends paid in the first half of 2011, representing a decrease of 19.8 million compared to the dividends paid in the first half of 2010, A decrease of 19.2 million in other financial liabilities in the first half of 2011 (including a disbursement of 18.2 million in respect of part of the refinancing expenses), compared to a decrease of 8.5 million in the first half of Risks and uncertainties relating to the second half of 2011 The main risks and uncertainties identified by the Group concern: The economic environment and the situation of the advertising market in France and Spain, which are expected to affect the sales prospecting by PagesJaunes and QDQ Media in their respective markets, The Group s social relations environment in France associated with the introduction of a commercial reorganisation plan. The social action in June severely disrupted commercial activity and will have a negative impact on the 2011 full-year results. The Group estimates that the industrial action in June will have an impact of approximately 20 million on its fullyear revenues, Developments in competition on the Internet, particularly with regard to search, geographic and mapping services, which may affect the ability of PagesJaunes and Mappy to maintain their rate of revenue growth. PagesJaunes Groupe Half-year financial report 30 June

14 3. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3.1 Consolidated income statement (Amounts in thousands of euros, except data relating to shares) Notes nd Quarter nd Quarter 2010 Revenues 6 534, , , ,349 External purchases (117,164) (116,358) (67,363) (65,651) Other operating income 1,579 2, ,191 Other operating expenses (4,926) (5,895) (2,518) (3,425) Personnel expenses : - Salaries and charges 7 (168,184) (166,722) (91,265) (93,019) Gross Operating Margin 245, , , ,444 - Employee profit-sharing 7 (6,845) (7,202) (3,892) (3,866) - Share-based payment 7 (748) (851) (348) (388) Depreciation and amortisation 13 & 14 (11,719) (8,654) (6,246) (4,485) Result of asset disposals 8 (171) (4) (7) (5) Restructuring costs Acquisition costs of shares (550) (429) (550) (429) Share of profit or loss of an associate (46) - (46) - Operating income 225, , , ,271 Financial income 2,498 1,826 1, Financial expenses (59,751) (47,420) (35,128) (24,079) Gain (loss) on foreign exchange Net financial income 4 (57,253) (45,594) (33,756) (23,554) Corporation tax 5 (62,742) (69,558) (36,004) (39,828) Income for the period 105, ,053 61,384 74,889 Income for the period attributable to: - Shareholders of PagesJaunes Groupe 105, ,053 61,376 74,889 - Non-controlling interests Net earnings per share (in euros) Net earnings per share of the consolidated group - basic diluted PagesJaunes Groupe Half-year financial report 30 June

15 3.2 Statement of comprehensive income (Amounts in thousands of euros, except data relating to shares) Notes nd Quarter nd Quarter 2010 Income for the period report 105, ,053 61,384 74,889 Net (loss) /gain on cash flow hedges - Gross 23,757 (27,428) (1,801) (6,315) - Deferred tax (8,180) 9, ,174 - Net of tax 6 15,577 (17,984) (1,181) (4,141) Exchange differences on translation of foreign operations Other comprehensive income 15,577 (17,984) (1,181) (4,141) Total comprehensive income for the period, net of tax 121, ,070 60,203 70,749 Total comprehensive income for the period attributable to: - Shareholders of PagesJaunes Groupe 121, ,070 60,195 70,749 - Non-controlling interests PagesJaunes Groupe Half-year financial report 30 June

16 3.3 Statement of financial position (Amounts in thousands of euros) Notes 2011 As at 31 December ASSETS Net goodwill 12 83,080 66,687 66,330 Other net intangible fixed assets 13 57,944 49,154 36,267 Net tangible fixed assets 14 27,301 27,694 25,154 Investment in an associate Available-for-sale assets Other non-current financial assets 6 1,500 1, Net deferred tax assets 5 17,427 31,572 38,367 Total non-current assets 187, , ,006 Net inventories 18 3,915 2,194 7,311 Net trade accounts receivable , , ,222 Other current assets 20 35,392 27,830 32,795 Current tax receivable 5 14,618 1, Prepaid expenses , , ,832 Other current financial assets ,804 Derivative financial instruments Cash and cash equivalents 7 58, ,977 46,523 Total current assets 616, , ,904 TOTAL ASSETS 804, , ,911 LIABILITIES Share capital 56,197 56,197 56,197 Issue premium 98,676 98,676 98,676 Reserves (2,426,040) (2,509,017) (2,510,307) Income for the period attribuable to shareholders of PagesJaunes Groupe 105, , ,053 Other comprehensive income (25,357) (40,934) (53,429) Own shares (3,879) (4,037) (3,876) Equity attributable to equity holders of the PagesJaunes Groupe 23 (2,194,925) (2,154,188) (2,289,685) Non-controlling interests 39-0 Total equity (2,194,886) (2,154,188) (2,289,685) Non-current financial liabilities and derivatives 7 1,946,744 1,962,358 2,011,456 Employee benefits - non-current 25 50,847 47,435 45,232 Provisions - non-current 25 6,979 6,813 5,653 Deferred tax liabilities 5 1,136 1,136 1,132 Total non-current liabilities 2,005,706 2,017,742 2,063,473 Bank overdrafts and other short-term borrowing 7 21,851 38,970 14,029 Accrued interest 7 8,297 4,739 4,057 Provisions - current , Trade accounts payable 24 96, ,998 94,347 Employee benefits - current , , ,197 Other current liabilities 25 94,872 94,808 93,050 Corporation tax Deferred income , , ,346 Total current liabilities 993,642 1,003, ,123 TOTAL LIABILITIES 804, , ,911 PagesJaunes Groupe Half-year financial report 30 June

17 3.4 Statement of changes in shareholders equity (Amounts in thousands of euros) Number of shares in circulation Share capital Issue premium Own shares Income and reserves Cash flow hedges Translation reserve Group equity Noncontrolling interests Total equity Balance as at 31 December ,450,576 56,197 98,676 (3,831) (2,328,709) (35,445) - (2,213,112) - (2,213,112) Total comprehensive income for the period, net of tax 123, , ,053 Other comprehensive income, net of tax (17,984) - (17,984) (17,984) Comprehensive income for the period, net of tax 123,053 (17,984) - 105, ,070 Share-based payment Dividends paid (182,448) (182,448) - (182,448) Shares of the consolidating company net of tax effect (1,649) (45) (45) - (45) Balance as at 30 June ,448,927 56,197 98,676 (3,876) (2,387,254) (53,429) - (2,289,685) - (2,289,685) Total comprehensive income for the period, net of tax 121, , ,873 Other comprehensive income, net of tax 12,495 12,495 12,495 Comprehensive income for the period, net of tax 121,873 12, , ,367 Share-based payment 1,290 1,290 1,290 Dividends paid Shares of the consolidating company net of tax effect (83,234) (161) (161) (161) Balance as at 31 December ,365,693 56,197 98,676 (4,037) (2,264,091) (40,934) - (2,154,188) - (2,154,188) Total comprehensive income for the period, net of tax 105, , ,486 Other comprehensive income, net of tax 15,577-15,577 15,577 Comprehensive income for the period, net of tax 105,478 15, , ,063 Share-based payment Dividends paid (162,697) (162,697) - (162,697) Shares of the consolidating company net of tax effect 19, Other Balance as at 30 June ,385,529 56,197 98,676 (3,879) (2,320,561) (25,357) - (2,194,924) 39 (2,194,885) PagesJaunes Groupe Half-year financial report 30 June

18 3.5 Cash flow statement (Amounts in thousands of euros) Notes nd Quarter nd Quarter 2010 Income for the period attribuable to shareholders of PagesJaunes Groupe 105, ,053 61,376 74,889 Depreciation and amortisation of fixed assets 12 & 14 11,719 8,654 6,246 4,485 Change in provisions 22 3,048 5,745 1,549 4,255 Share-based payment Capital gains or losses on asset disposals Interest income and expenses 4 40,471 24,965 25,716 13,152 Hedging instruments 6 16,782 20,629 8,040 10,402 Unrealised exchange difference 104 (18) 92 (18) Tax charge for the period 10 62,742 69,558 36,004 39,828 Share of profit or loss of an associate Non-controlling interests Decrease (increase) in inventories (1,721) (877) (1) (1,427) Decrease (increase) in trade accounts receivable 55,017 75,530 73,670 60,640 Decrease (increase) in other receivables (13,456) (6,596) 10,124 6,990 Increase (decrease) in trade accounts payable (12,494) (8,426) 9,272 14,955 Increase (decrease) in other payables 7,863 (7,907) (84,913) (76,331) Net change in working capital 35,209 51,725 8,152 4,828 Dividends and interest received 1, , Interest paid and rate effect of net derivatives (46,541) (42,783) (24,079) (21,800) Corporation tax paid 5 (69,479) (65,157) (35,655) (36,282) Net cash from operations 162, ,614 89,144 94,402 Acquisition of tangible and intangible fixed assets 13 & 14 (20,094) (17,388) (11,111) (11,269) Change in suppliers of fixed assets (576) (406) (279) 767 Proceeds from sale of tangible and intangible assets (728) Acquisitions of investment securities and subsidiaries, net of cash acquired 5 (11,045) (16,492) (10,345) (2,373) Investments in associates (200) - (200) - Proceeds from disposals of financial assets, net of cash sold 5-5, Decreases (increases) in marketable securities and other long-term assets 27 (401) (1,805) (387) (931) Net cash used in investing activities (32,250) (30,743) (22,321) (14,534) Cash flows arising from changes in ownership interests not (55) (460) (55) (95) Increase (decrease) in borrowings 27 (19,196) (8,505) (19,459) 1,535 Movements in own shares Capital increase Non-controlling interests contribution Dividends paid 8 (162,697) (182,447) (162,697) (182,447) Net cash provided by (used in) financing activities (181,624) (191,216) (182,022) (180,916) Impact of changes in exchange rates on cash (104) 18 (92) 18 Net increase (decrease) in cash position (51,674) (24,328) (115,290) (101,030) Net cash and cash equivalents at beginning of period 103,501 61, , ,146 Net cash and cash equivalents at end of period 7 51,827 37,116 51,827 37,116 PagesJaunes Groupe Half-year financial report 30 June

19 3.6 Notes to the condensed consolidated financial statements Note 1 Description of the business activity For more than sixty years, the PagesJaunes Groupe has delivered a diversified range of products and services for the general public and businesses, with its core business comprising directories in France and abroad on both printed and online media. The Group s principal activities are described in Note 3. The financial year of the companies of the PagesJaunes Group runs from 1 January to 31 December. The presentation currency of the condensed consolidated financial statements and the accompanying notes is the euro. PagesJaunes Groupe is a limited liability company listed on Euronext Paris (PAJ) compartment A. This information was approved by the PagesJaunes Group Board of Directors at its meeting of 26 July Note 2 Basis for preparation of the condensed consolidated financial statements and accounting principles The consolidated financial statements of PagesJaunes Groupe for the six-month period ending on 30 June 2011 have been prepared in accordance with standard IAS 34 Interim Financial Reporting. Being summary financial statements, they do not contain all the information required by IFRS and should be read in conjunction with the annual consolidated financial statements of the Group for the year ending 31 December 2010 included in the reference document filed with the AMF on 4 May 2011 under the number D , subject to specific requirements set out for the preparation of interim accounts as described below. In line with its strategy, the Group has decided to modify its internal and external reporting structure in order to assess the performance of each operating segment and allocate resources to the respective segments. The segments, determined in accordance with IFRS 8 Operating Segments, are as follows: Internet, Printed Directories and Other Businesses. Pursuant to IAS 8, this is a change of accounting method which has led to a retrospective change in the segment reporting. The accounting principles used are consistent with those used in the preparation of the annual consolidated financial statements for the year ending 31 December 2010, with the exception of any new standards, amendments and interpretations which are mandatory with effect from 1 January 2011, but which have no significant impact: IAS 32 Classification of Rights Issues, applicable to financial years commencing from 1 February 2010, IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments, applicable to financial years commencing from 1 July 2010, IAS 24 Related Party Disclosures, applicable to financial years commencing from 1 January 2011, IFRIC 14 Prepayments of a Minimum Funding Requirement, applicable to financial years commencing from 1 January 2011, 2010 improvements: o Amendments to IFRS 3 Business Combinations, applicable to financial years commencing from 1 July 2010, o Amendment to IFRS 7 Financial Instruments Disclosures, applicable to financial PagesJaunes Groupe Half-year financial report 30 June

20 o o o years commencing from 1 January 2011, Amendment to IAS 1 Presentation of Financial Statements, applicable to financial years commencing from 1 January 2011, Amendment to IFRIC 13 Customer Loyalty Programmes, applicable to financial years commencing from 1 January 2011, Amendment to IAS 34 Interim Financial Reporting, applicable to financial years commencing from 1 January None of these new standards and interpretations has had a significant effect on the consolidated financial statements as at 30 June Furthermore, these principles do not differ from the IFRS standards as published by the IASB insofar as there would be no significant impact from the implementation of the amendments and interpretations which are mandatory for financial years commencing from 1 January 2011, as set out in the reference framework published by the IASB, but which are not yet mandatory in the reference framework endorsed by the European Union. Finally, the Group is not applying the following instruments, which were not adopted by the European Union as at 30 June 2011: Amendment to IFRS 7 Disclosures Transfers of Financial Assets Amendment to IAS 12 Deferred Tax: Recovery of Underlying Assets IFRS 9 Financial Instruments IFRS 10 Consolidated Financial Statements IFRS 11 Joint Arrangements IFRS 12 Disclosures of Interests in Other Entities IFRS 13 Fair Value Measurement IAS 28 revised Investments in Associates and Joint Ventures IAS 19 revised Employee Benefits Amendment to IAS 1 Presentation of Financial Statements presentation of items of other comprehensive income. Nonetheless, the Group is currently reviewing the practical consequences of these new instruments and the effects of their implementation on its future financial statements. At this stage of the review, the impacts on its consolidated financial statements are expected to be as follows: IFRS 11 will replace IAS 31. Accounting for partnerships must be based on the substance of the agreements and mainly on the analysis of the resulting rights and obligations. Proportional consolidation is discontinued as a consolidation method. This is the method currently used for Editus Luxembourg, which could be consolidated by the equity method. This standard will be applied retrospectively. In 2010, this entity contributed 8.4 million to consolidated revenues and 2.6 million to consolidated GOM. IFRS 12 requires the publication of very detailed information on the determination of the scope of consolidation and on the risks associated with interests in other entities (subsidiaries, joint ventures, associated entities, SPVs, non-consolidated entities). It should be noted that the IFRS 10, IFRS 11, IFRS 12 and IAS 28 standards revised in 2011 are all required to be applied on the same date. The main effects of the revision of IAS 19 are as follows: actuarial losses and gains on post-employment benefits must be recognised immediately in non-transferable equity, the recognition of the return on plan assets in the income statement based on an expected rate of return is eliminated (the same rate of return on first-class bonds must be used as that used for the accretion of the liability), the spreading of non-vested past service costs is discontinued, disclosures are improved by refocusing them on the characteristics of the plans and the associated risks. PagesJaunes Groupe Half-year financial report 30 June

21 It also redefines the principles of the accounting conditions for severance payments, which must be recognised when the entity is no longer able to withdraw its offer or when a restructuring liability under IAS 37 must be recognised. This standard will be the subject of limited retrospective application. The main impact expected by the Group is the immediate recognition of actuarial losses and gains on post-employment benefits in non-transferable equity; these represented a charge of 3.1 million in 2010 and a total unrecognised liability of 17 million as at 31 December All of the standards and interpretations adopted by the European Union as at 30 June 2011 are available on the website of the European Commission at the following address: In order to prepare the financial statements, the Management of the Group is required to make estimates and assumptions which have an effect on the amounts presented as assets and liabilities, the contingent liabilities at the date of preparation of the financial statements and the amounts presented as income and expenses for the financial year. The Management continuously evaluates these estimates and assessments on the basis of its past experience, as well as various other factors deemed reasonable, which combine to form the basis of its assessment of the book value of the assets and liabilities. This includes in particular goodwill, share-based payments and the valuation of pension liabilities. The actual result may differ markedly from these estimates due to different realisation conditions. Finally, where a specific transaction is not covered by any standards or interpretations, the Management of the Group applies judgment to define and apply accounting methods which will provide relevant and reliable disclosures, ensuring that the financial statements: present a true and fair view of the financial position, the financial performance and the cash flow of the Group, reflect the economic substance of transactions, are neutral, are prudent, and are complete in all material respects. Seasonal variations Although the activities of the Group are not subject to seasonal effects per se, in order to optimise costs, the dates of publication of the printed directories (which determine the recognition of income and related expenses) may vary from one half-year to the next, as each printed directory appears only once a year. Impairment tests as at 30 June 2011 In the absence of any indication of loss of value, it has not been necessary to carry out any impairment tests on goodwill and intangible fixed assets as at 30 June PagesJaunes Groupe Half-year financial report 30 June

22 Note 3 Segment information The Group s core business activity is the provision of local information, principally in France, through the publication of printed and online directories, and the publication of editorial content to assist users in making searches and choices. Through its subsidiaries, the PagesJaunes Group conducts three complementary businesses: the provision of content and services, media and advertising representation. It offers a diversified range of products and services associated with these activities for the general public and businesses. The Group s business model is based on that of the media, i.e. offering quality content which generates an audience and then monetising this audience, either as a whole or in segments, among businesses. The Group s activities are organised in three segments: Internet: These are the activities carried out through the Internet. The main products are listing, targeted advertising and provision of advertising space for local and national advertisers (often referred to as display) and finally a complete range of products and services for the provision and distribution of information with local content. This segment comprises all the Internet activity of PagesJaunes SA: the pagesjaunes.fr and pagespro.com online directories, the creation and marketing of display advertisements and content, the development and hosting of Internet sites, and annoncesjaunes.fr online small ads. The Group s other subsidiaries are also represented in this segment: the activities and services provided by Mappy (including geolocation, base maps, online bookings), direct marketing (of the ing type) carried out by the PagesJaunes Marketing Services subsidiary, the Internet activities of QDQ Media and Editus in Spain and Luxembourg respectively (listing and Internet display, production and hosting of websites, sale of web optimisation and visibility solutions of the SEO or SEM type). This segment also includes online people and profile searching with 123people, online quotation requests and the generation of contacts in the building and construction industry with Keltravo, the management of online real-estate ads with A Vendre A Louer, promotional offers (couponing) with 123deal and the Internet advertising representation activity of Horyzon Média. Printed Directories: This is the Group s historical activity, involving the publication, distribution and sale of advertising space in printed directories (PagesJaunes, l Annuaire and the directories of QDQ Media in Spain and Editus in Luxembourg). Other Businesses: This comprises on the one hand the specific activities of PagesJaunes SA: directory enquiry services by telephone and SMS ( ), Minitel and the QuiDonc reverse directory. This segment also includes a number of activities of PagesJaunes Marketing Services: telemarketing, data mining, database generation, prospect processing and traditional direct marketing activities (data entry and postage). PagesJaunes Groupe Half-year financial report 30 June

23 The table below shows a breakdown of the main aggregates by business segment: Amounts in thousands of euros Revenues 534, ,260 - Internet 281, ,945 - Printed directories 233, ,936 - Other 19,164 24,380 Gross Operating Margin 245, ,345 - Internet 126, ,114 - Printed directories 111, ,098 - Other 7,202 8,133 Amortisation of tangible and intangible fixed assets (11,719) (8,654) - Internet (7,097) (4,335) - Printed directories (4,150) (3,981) - Other (472) (338) Acquisitions of tangible and intangible fixed assets 20,094 17,388 - Internet 17,766 14,697 - Printed directories 2,027 1,848 - Other PagesJaunes Groupe Half-year financial report 30 June